Progress and Strategy to achieve universal coverage in Lao PDR: Issues for discussion Presented at 4 th Technical review meeting for Health Policy and Health Finance knowledge Hub Melbourne, Australia, October 7-11, 2011

Current status of social health protection schemes (2011)

Current financing arrangements  Budget Revenues  Hospital Salaries Investment Recurr. cost  Civil serv. Formal/infor mal sector, DPs Contributions (SSO, SASS, CBHI, HEF)  Fund / scheme Payment  MOH / Province Budget (GoL & donors)  General population Direct payments for fees and medicines (OOP 60% of THE) Key issues Low budget spending → implications for staffing, facility standards, cost of services Coverage of health insurance is low (around 12% of population) Heavy reliance on direct payments to fill gaps → implications for equity and access

Possible future financing arrangements  Budget Revenues  Hospital Salaries Investment Recurr. cost  Civil serv. Formal sector Contributions  Fund / scheme Payment  MOH / Province Budget  General population Direct payments for fees and medicines  Fund for free MCH services Payment (ensure 9% of Total Gov expenditure is for health Aim to reduce reliance on direct payments Aim to increase SHI coverage

Progress and Strategy Free maternal and children under five policy finalized by MOH and submitted to the government for approval by Nov, 2011 Implementation guidelines for free maternal and children under five policy drafted and presented to the HFTWG Costing for free maternal and children under five policy completed NT2 Revenue (Government budget) allocated for Health sectors to expand HEF coverage from 49 to 64 districts Government commitment to give 9% of total government expenditure to health sector for all levels (central, provincial and district ) National Health Insurance Decree finalized by MOH and submitted to Government for official approval Road map for Health insurance merger agreed by Gov and DPs

Road Map Law: Charter And Mandate Establish NHI Organization Establish Technical Functions Four Baskets, One Fund Establish LT Funding For Indigent Cover Benefit Delivery Database Create a Plan For Membership Management Universal Coverage Develop a Plan For Provider Mgt National QA and Accreditation Capacity Building 50% Coverage Merging of Membership Databases Begin Merging at Provincial Level Nationwide Risk Pooling Capacity Building on SHI Technical And Operational Functions Long-term IT Plan Development of Quality Standards, Capacity Building for Function Full Merge Integrated NHI IT System ORGANIZATIONAL FUNDING OPERATIONAL MEMBERSHIP PROVIDERS Fully Sustainable Funding 30% Coverage 14% Coverage Evaluate Benefits, Contributions, Payment Fully Capacitated Appropriation to support Law Transfer Staff & Budget Implementing Team

Government spending on health has been increasing Health spending has increased steadily over time… Note: Planned expenditures, based on official gazette …but increases have been quite erratic from year-to-year

Medium term expenditure pressures and financing options Wage bill – Increase in quota – Continued salary increases – Incentives for rural / remote service Policies / programs to subsidize health services – Free MCH service policy – Health Equity Fund – Subsidized health insurance Expand / maintain health facility infrastructure Government budget Mandatory health insurance (SSO / civil servants) – Difficult to expand coverage due to limited formal sector Voluntary health insurance – Difficult to expand coverage – Subsidized health insurance Out-of-pocket payments – Inequitable and makes health care unaffordable for many External financing – Can fill gap in short to medium term Expenditure pressures (strategies) Financing (Challenges)

What will it take to achieve 9% of government spending on health? – It depends… If focus is on recurrent spending, share on health is around 3.5-4% Trend depends on whether we focus on planned or actual Share of health in total spending has reached over 7% in 10/11 But erratic due to external financing Does not reflect commitment of domestic resources

Thank you